Closely Intertwined!

What do customers want? Which products or services have the potential to drive
future economic growth – for both the customer and LANXESS? How can the company identify the products and services with this kind of potential? The only way to find them is through close dialogue with customers and thorough market analysis. But where does LANXESS currently stand in this
process? On the hunt for clues.

For many years, our focus was on optimizing our plants and increasing their efficiency. “We must not lose sight of these goals now either,” says CEO Matthias Zachert. But at the same time, he urges all employees to embrace a mindset shift: “We need to shift our focus – toward the customer. “We want to become a knowledge-based, innovation-driven company that constantly keeps an eye on markets and customers, and develops tailored, high-margin solutions for them.” To help drive this transformation, the Commercial Excellence Stream was established as part of the Business Excellence program. The insights gained from this Stream are now being shared across the company and further refined. Roy van Griensven, who heads the Stream, says: “The only way to identify new business opportunities and differentiate our offerings is through a deep understanding of the markets and our customers.” That’s exactly what it’s all about: sustainably boosting margins with customized products and services, thereby reducing LANXESS’s exposure to economic volatility.

Xpress spoke with teams across the company and found that many areas have already taken important steps. The Material Production Products business unit (MPP BU), for instance, is creating new products in response to customer suggestions. The Rhein Chemie (RCH BU) and Lubricant Additives Business (LAB BU) business units are strengthening customer relationships through meetings, seminars, and workshops. Due to the complexity of its products, the Liquid Purification Technologies business unit (LPT BU) has always relied on close collaboration with customers.

Recognized by the
Customer
The RCH BU, for instance, has clearly succeeded in translating customer focus into action for Japanese tire maker Bridgestone. Bridgestone recognized LANXESS as one of just six strategic suppliers following a global evaluation of all suppliers by the company. Following this, representatives from the RCH BU, which supplies Bridgestone with rubber additives, were invited to the company’s headquarters in Japan. In April, a delegation from Bridgestone paid a return visit to Leverkusen and LANXESS’s headquarters in Cologne. “We’re obviously thrilled about this recognition from our customer,” says Holger Graf, who heads the Functional Tire Additives business line at RCH.

The LAB BU strongly emphasizes personal exchange and direct contact. Last year, it organized a seminar on the Reolube® branded fire-resistant product portfolio for around 100 existing and potential customers, which helped boost sales in the Greater China sub-region. “We received significantly larger orders following the seminar,” says Colin Zhang, Sub-Region Sales Head, LAB BU. He attributes part of this success to the external experts who spoke at the event. “Thanks to their participation, the event became more like a workshop where important knowledge was exchanged.” The Reolube® product portfolio is well established for use in turbines at power plants, as well as in various industrial applications such as waste incineration, recycling, paper production, petrochemicals, steel manufacturing, and more.

Customized  Innovation
The MPP business unit takes a slightly less personal but equally customer-centric approach to the question of what new products or better applications it could bring to market that are in demand among customers. “When we received a customer request for alternative chemicals for household care and textiles, we quickly realized that our Oxone™ chemistry could be a possibility,” says technical applications manager Hannah Nowotarski from Wilmington. Oxone™ has been manufactured in Memphis for more than 60 years and is commonly used in swimming pools, electronics, and oral care products.  Kelly Board, technical applications manager in Sudbury, UK, explains: “We have found new applications for our product in recent years and now aim to extend its use to the household cleaning sector.” Further customer surveys indicated that stain removal at low temperatures could be a promising application for Oxone™. The reason is that customers seek to reduce costs, as washing clothes with hot water uses a great deal of energy, while also prioritizing sustainability. More than 60 percent of carbon emissions from washing clothes are caused by heating the water. But with Oxone™, even stubborn stains can be removed at low temperatures with little impact on fabric quality.

“We arrived at these results through collaboration with our colleagues in Singapore and the UK,” says Ethan Solomon. The team in Singapore – led by Melvin Tan and Adrian Cheong – developed a robust test protocol  to quickly measure stain removal from textiles. The team in Wilmington conducted testing using industry-standard laboratory equipment for laundromats, which is normally reserved for LANXESS Silvadur technology. “Our collaboration worked extremely well. Now we want to bring our new application to market. We have already had promising discussions with several consumer packaged goods manufacturers,” says Solomon.

Riding the “Clean
Cosmetics” Trend
Janna Eggert, Head of Marketing Communication, MPP BU, and her colleagues Melanie Keck, Technical Application Manager, and Vivien Konetzky, Global Product Manager, have also made promising connections for their new preservative Neolone® PH Max. The global Hygiene & Care team presented the newly formulated preservative for personal care products at the world’s largest trade show for cosmetics and personal care, held in Amsterdam. “There was strong interest following the expert talk given by our colleague Ziang Li,” says Eggert. The first samples have already been sent to customers, with more ready to go.

Neolone® PH Max combines the well-established preservative phenoxyethanol, known for being highly antimicrobial and extremely skin friendly, with pelargonic acid, a multifunctional ingredient sourced from sunflower oil. This new booster helps reduce the amount of phenoxyethanol needed, among other benefits. Neolone® PH Max stands out for its low toxicity, lack of sensitization potential, and reliable efficacy against both bacteria and fungi. It is easy to use and suitable for a wide range of creams, lotions, and serums. “A big advantage for our customers is that they can usually incorporate it into their existing formulations,” says Keck. This is a prized benefit and one that adds further depth to MPP’s offering in this product category.

Alongside the traditional phenoxyethanol-based Neolone® PH 100 preservative, the MPP BU also offers the eco-friendly Neolone® BioG preservative. “Our customers are big fans of both products,” says Eggert. The sustainable preservative meets the expectations of many end customers, but comes at a somewhat higher price than a conventional product, of course. In addition, its composition often makes it difficult to incorporate into an existing formulation. “The ideal approach is to incorporate the product as a preservative when beginning to develop a new, sustainable formulation,” says Keck. Several large customers are already developing new products that include the sustainable preservative.

“We’re naturally supporting these development efforts and supplying product samples,” Keck notes. The focus is on building long-term customer relationships. But this takes persistence – developing a product can be a multi-year process. “The same was true for our Neolone® PH Max,” she explains. “Regulations, compliance rules, new requirements, and the required safety assessments were all part of the research process,” says Keck. “At the end of the day, our preservative needs to work flawlessly despite all these requirements – and across a wide range of different formulations.” The global Hygiene & Care team is proud of its new preservative. Unlike the Neolone® BioG preservative, it’s more moderately priced and positioned in the mid-range segment. In addition, the trend among customers toward “clean cosmetics“ – meaning fewer ingredients but higher performance – continues to grow. “We’re meeting this consumer demand as well with the booster in Neolone® PH Max,” says Eggert.

It All Starts with Customer Conversations
“Just delivering our products to the customer’s doorstep and calling it a day – that’s never been how we do things,” says Nadja Hermsdorf, Business Development & Applications, LPT BU. With more than a decade of experience in the LPT BU’s food segment, she knows: “One reason our customers choose us is the comprehensive service we provide.” She knows her customers well – whether they’re from the sugar or beverage industry, or producers of starch-based sweeteners around the world. “We support them every step of the way, including if they’re planning to expand their facility or build a new one from scratch.” Her day-to-day work, she says, revolves largely around her customers’ needs, problems, and questions. This is because the ion exchangers used to purify many raw materials for the food industry are complex to work with. “If customers purchase our ion exchangers and aren’t satisfied with the results, then we have a problem. Our job is to train them so they can they achieve the best possible results with our products.” That’s not always easy, of course. For key customers, she occasionally conducts on-site seminars in coordination with the sales team. “This is something we do for our top-tier customers.” Many of these customers operate globally and send their employees – such as process engineers and plant operators – to the seminars.

“To reach a broader customer base, we also offer online seminars,” says Hermsdorf. Interest in the training sessions on the LewaPlus® module for food desalination was especially high in the Americas, EMEA, and APAC regions. The module enables customers to assess their existing food desalination units and develop new system components. It allows them to optimize settings and thereby reduce waste, chemical usage, or water consumption. “During our most recent webinar, 66 of the 97 attendees were new contacts,” Hermsdorf reports. Transferring knowledge not only helps strengthen relationships with key customers and establish new ones, it also creates added value for the customers themselves.

Due to the close customer relationships and the complexity of ion exchangers, the COVID-19 pandemic was an extremely challenging time. Contact via Teams alone is no substitute for an in-person meeting. Since trade shows don’t always deliver the desired return, LPT regularly organizes face-to-face meetings around the world. For example, in August of this year, a sugar seminar will be held in Thailand for the third time, in collaboration with the distributor. “After in-person events like these, virtual discussions become much more natural,” says Hermsdorf. In fact, customers value these in-person meetings so highly that they’re even willing to pay a small fee for them. This was the case about eighteen months ago. At the LANXESS Tower in Cologne, 36 participants from 21 companies across 11 countries came together for the event. In addition to researchers and engineers from direct customers and distributors, the event was also attended by key plant manufacturers and thought leaders in the field. “Such face-to-face meetings are truly the most valuable,” says Hermsdorf. “Speaking with someone in person conveys much more than a meeting held solely via Teams,” says Hermsdorf. And no expenses were incurred by LANXESS.

It goes without saying that all these interactions with customers also generate new ideas for products or services. “But many ideas turn out to be too complex to implement. In some cases, we would need to completely reconfigure the production facilities to implement them,” she says. That immediately raises a few questions: What potential does such an innovation have? When would it pay off? Is it future-oriented? The business unit regularly conducts innovation workshops. Around 30 employees from the Laboratory, Application Technology, and Research departments participated in the most recent workshop back in February. “In the end, we had three promising new ideas that we decided to pursue further,” says Hermsdorf. Should a truly breakthrough idea emerge, it can now be submitted for consideration for the innovation budget.

Quotes

Deeper Dialogue – Improved Outcomes
“Direct interaction and dialogue, such as with Bridgestone, particularly help us to understand our customers’
needs more deeply. This is the only way we can strategically advance our entire portfolio and collaborate with
customers to create improved and more sustainable products and solutions.“
Holger Graf, Head of the Functional Tire Additives Business Line, RCH BU

No Limits
“The new application for Oxone was identified and implemented so quickly thanks to excellent cross-country collaboration we worked together perfectly across countries. From Wilmington, US, to Sudbury, England, to Singapore, all our labs worked intensively to find solutions. This demonstrates how much can be achieved when we all give our best and share knowledge.”
Ethan Solomon, Head of Application Technology in Wilmington, DE, US

Closer to Customers Through Training
“Our products are complex and require explanation. That’s why we need to offer our customers seminars and training to ensure they achieve the best results. This naturally has the side effect of allowing us to gain a deep understanding of our customers, which sometimes leads to new product ideas.”
Nadja Hermsdorf, Business Development & Applications, LPT BU

Infobox

Customer Engagement Academy

LANXESS is entering uncharted waters with the Commercial Excellence Academy. The academy is designed for sales and marketing employees worldwide to sharpen their focus on business opportunities and work on their implementation.

A primary objective of the newly launched Commercial Excellence Academy is to collaboratively shape the company’s future. The Academy is geared toward marketing and sales employees. The first 60 participants have already been nominated for the three events in June and September. CEO Matthias Zachert greeted the teams: “You were chosen for this program because you stand on the front lines for LANXESS and interact directly with our customers.” He stressed: “As managers, you play a crucial role in driving sustainable growth and delivering added value to our customers in an increasingly complex environment.”

Participants in the academy receive up-to-date insights on the topic of Commercial Excellence. The program kicks off in the US and across the AMERICAS region. “That’s no coincidence, as this region holds great strategic importance for us and makes a crucial contribution to our global success,” Zachert explained.

Participants in the academy are expected to identify and work on growth projects within their respective regions, among other tasks. These can be specific to their own business unit or include other BUs. The teams will work on these projects over a period of 90 days, supported by experienced business coaches. “The coaches all have many years of experience and expertise in the chemical industry. This is how we want to improve our approach and succeed and grow together in the market,” said Zachert.

At the end of the 90 days, participants will be given the chance to showcase their findings and proposals to a panel of senior executives. The best ideas will then be selected and their teams supported in implementing them on a larger scale.

The Academy will be rolled out gradually worldwide.